Networking now 30% of HPE revenue but over half of profits

• HPE’s acquisition of Juniper Networks is shifting the company’s profit mix toward higher-margin networking software, allowing it to escape the commoditized server markets where Nvidia dominates.

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There’s a hidden line in HPE’s latest earnings commentary that tells you everything about where this company is headed. An HPE executive put it clearly: “Networking, which now accounts for 30% of our revenue and more than half of our profits.” That one sentence is the thesis.

Hewlett Packard Enterprise (New York Stock Exchange: HPE) just reported total revenue in the first quarter of fiscal 2026 of $9.3 billion, up 18% year-over-year, and the networking segment is doing the heavy lifting. Network revenues reached $2,706 million, a year-over-year increase of 151.5%, driven almost entirely by the Juniper Networks acquisition that closed in July 2025. The standout subsegment? Data center networks increased 382.6% year over year.

But revenue growth…